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Home My WebLink AboutStaff Report (Finance)+ CALIFORNIA NATIONAL CITY ALAV INCORPORATED City Council Staff Report March 4, 2014 ITEM Staff Report: Resolution of the City Council of the City of National City authorizing various Mid -Year Budget Adjustments. BACKGROUND During the Fiscal Year 2014 Mid -Year Budget Review at the February 18th City Council meeting staff recommended several budget adjustments. With this item, staff brings forward a proposed Council resolution adopting the February 18t1 recommendations. Listed below are the recommended adjustments. RECOMMENDATIONS A. General Fund (Fund 001): Expenditure Appropriation Adjustments: $1,990,744.50 1. Fire Department (412) — Overtime budget increase: $150,000 The department requests an increase of $150,000 to its overtime budget of $499,000. The anticipated increase in overtime expenditures is related to long-term injuries of employees, which requires other Fire personnel to work additional overtime hours to ensure staffing sufficient for the safety of City personnel, as well for the safety and welfare of the general public. Department of Finance recommendation: Authorize the City Manager to approve appropriation increases totalling up to $150,000 for additional overtime expenses to be funded from either available savings elsewhere in the General Fund budget or, if necessary, unassigned fund balance in the General Fund. 2. Police Department (411) — Capital Outlay budget increase for facility upgrades: $150,000 The department requests an increase of $150,000 to its Capital Outlay budget of $250,000. The increase in capital outlay expenditures is related to the completion Property & Evidence Room upgrades. The department must expand its current storage capacity to accommodate the storage of human/biological forensic evidence as a result of the County of San Diego's no longer providing that service. Additional storage space is required in order to accommodate refrigeration units, equipment, and related facility upgrades to ensure evidence is neither Page 2 Staff Report — Fiscal Year 2014 Mid -Year Budget Adjustments March 4, 2014 destroyed nor compromised. If this upgrade does not proceed, additional costs may be incurred for offsite storage in a facility that meets departmental standards. Department of Finance recommendation: Authorize the City Manager to approve appropriation increases totalling up to $150,000 for the Property & Evidence Room project to be funded from either available savings elsewhere in the General Fund budget or, if necessary, unassigned fund balance in the General Fund. 3. Fire Department (412) — M&O budget increase for wearing apparel: $3,550 The department requests an increase of $3,550 to its wearing apparel budget of $57,847. The increase in expense is related to the purchase of Class A uniforms, per the City Council approved Memorandum of Understanding, for firefighters completing probation. Department of Finance recommendation: Approve an appropriation increase of $3,550 for the purchase of the uniforms to be funded from either available savings elsewhere in the General Fund budget or, if necessary, unassigned fund balance in the General Fund. 4. Non -Departmental (409) — Establish or increase appropriations to reflect acquisition of property for the relocation of the City of National City's Public Works facilities: $1,652,136.90 On August 20, 2013, the City Council authorized the acquisition of property located at 1726 Wilson Avenue for the relocation of the City's Public Works facilities. The appropriations are necessary to ensure the transaction is correctly recorded on the City's general ledger and will reflect the amount paid for the property as well as escrow fees and other transaction expenses. Department of Finance recommendation: Approve the establishment or increases of appropriations totalling $1,652,136.90 to properly record the property acquisition transaction. The funding source is unanticipated revenue received by the City from the sale of the 2100 Hoover Avenue site to the Housing Authority. 5. Mayor and City Council (401) — Establish appropriations to properly record expenditures related to the State of the City Address: $14,556 Since 2010, donations received and expenditures for the Mayor's State of the City Address have been recorded in a liability account entitled "Miscellaneous Deposits." This allowed the remaining balance in the account to be automatically carried forward into the succeeding fiscal year. This is not a recommended accounting practice, however. For true transparency, donations should be recorded in a revenue account and expenses in an appropriate expenditure account. This amount represents the sum of the balance in the Miscellaneous Deposits ledger account at the end of Fiscal Year ($6,056) and the donations received to date in the current fiscal year ($8,500). Page 3 Staff Report — Fiscal Year 2014 Mid -Year Budget Adjustments March 4, 2014 Department of Finance recommendation: Approve the establishment of an appropriation of $14,556 to properly account for State of the City Address expenses. A corresponding revenue account and budget should also be established (see below). General Fund (Fund 001): Revenue Budget Adjustment: $4,372,000.70 1. Other Revenue — Sales of Real Property (3601) — Establish a revenue budget: $1,652,136.90 This adjustment is needed to account for the unanticipated revenue received from the sale of the 2100 Hoover Avenue site for the purchase of the 1726 Wilson Avenue site. Department of Finance recommendation: Approve the establishment of a revenue budget of $1,652,136.90, as a companion to the recommended appropriation adjustment for the acquisition of the 1726 Wilson Avenue site. 2. Council Revenue — Donations -State of the City Address (3637) — Establish a revenue budget: $8,500 State of the City Address donations should be recorded in a revenue account. This amount represents the total of donations received to date in the current fiscal year. Department of Finance recommendation: Approve the establishment of a revenue budget of $8,500, as a companion to the recommended establishment of a State of the City Address appropriation. 3. Other Revenue — ROPS Funding from SA (3656) — Establish revenue budget: $2,711,363.80 Accounting practices do not require carrying forward from fiscal year to fiscal year revenues associated with continuing appropriations for capital projects, but doing so maintains alignment of appropriations with their corresponding revenues. This adjustment will allow the City to account for deferred revenues received from the Successor Agency in Fiscal Year 2013 to carry out obligations of ROPS III. Department of Finance recommendation: Approve the establishment of a revenue budget of $2,711,363.80. B. Section 8 Fund (Fund 502) — Expenditure Appropriation Adjustments: $24,000 Housing, Grants & Asset Management (419) - M&O increase for various items: $24,000 The department requests an increase in appropriations in the following accounts: • Professional Services (Acct #213): increase appropriation of $22,000 by $5,000, to hire a private law firm to handle Section 8 hearings, and $6,000, to pay a private law firm for ongoing legal expenses; • Memberships and Subscriptions (Acct #222): increase appropriation of $4,900 by $1,000, for membership dues for CAHA (California Association of Housing Authorities); Page 4 Staff Report — Fiscal Year 2014 Mid -Year Budget Adjustments March 4, 2014 • Material & Supplies (Acct #399): increase appropriation of $5,100 by $2,000, for the purchase of office supplies for the remainder of the fiscal year; and • Contract Services (Acct #299): increase budget of $36,000 by $10,000, to upgrade the HAPPY Software to Housing Pro, creating efficiencies in managing the Section 8 program. Department of Finance recommendation: Approve appropriation increases totalling $24,000, to be funded from Section 8 Fund fund balance. (The Section 8 fund has adequate fund balance to fund these requests.) C. Equipment Replacement Reserve Fund (Fund 644) — Expenditure Appropriation Adjustment: $40,000 Public Works Department (416) — Capital Outlay increase for the purchase of Mowers: $40,000 The department requests the replacement of two mowers used to maintain City owned park space that cost approximately $20,000. Department of Finance recommendation: Approve an appropriation increase of $40,000, to be funded from Equipment Replacement Reserve Fund fund balance. The Equipment Replacement Reserve Fund is designated for these specific purposes, and has adequate fund balance to fund this purchase. Budget Transfers During the mid -year budget review process, changes to the budget were identified that, if approved, would better reflect operational needs or the character of an expense. Department of Finance recommendation: Approve the budget adjustments described below. These transfers will not increase the overall appropriations. D. General Fund (001) 1. Transfer appropriations of $50,000 from Part -Time Salaries (Acct #100) to Contract Services (Acct #299) within the Community Development (418) department for the YMCA Agreement. 2. Transfer the Neighborhood Council (Activity #414) from the Community Development Department (418), including appropriations totalling $15,000, to the City Manager's Office (403). The staff member administering the program has moved from the Community Development Department to the City Manager's Office. This budget change is to ensure that oversight is properly aligned with the responsible department. Page 5 Staff Report — Fiscal Year 2014 Mid -Year Budget Adjustments March 4, 2014 3. Transfer the Community and Police Relations Committee (Activity #415) from the Community Development Department (418), including appropriations totalling $7,500, to the City Manager's Office (403). The staff member administering the program has moved from the Community Development Department to the City Manager's Office. This budget change is to ensure that oversight is properly aligned with the responsible department. 4. Transfer appropriations of $25,000 for student interns under the San Diego State University (SDSU) Sage Program from Part -Time Salaries (Acct #100) to Contract Services (Acct #299) within the City Manager's Office (403). RECOMMENDATIONS Adopt a resolution approving budget adjustments and transfers A — D as enumerated above. FISCAL IMPACT If all recommendations are approved, the impact of budget adjustments would be: • $1,990,744.50 increase of total General Fund appropriations, • $4,372,000.70 increase of the General Fund revenue budget, • Section 8 Fund appropriation increase of $24,000, and • Equipment Replacement Reserve Fund appropriation increase of $40,000.